Going beyond CSR: How social profit orientation can drive systemic social change

The majority of consumers believe it’s important for companies to take a stand on key social, environmental and political issues. And about 70% of employees say they wouldn’t work for a company without a strong purpose.

Across the world, the sentiment is the same: a survey of over 36,000 respondents in 28 countries believes that “societal leadership is now a core function of the business.”

Here’s what that means: Now is the time for for-profit organisations to go beyond corporate social responsibility (CSR) initiatives and adopt a social profit orientation in order to make as much impact as possible and meet consumers and employees where they are.

In this article, we’ll cover everything nonprofits need to know, including what social profit orientation is, what a profit-oriented organisation looks like and why it matters.

What is a social profit-oriented approach?

As the Chronicle of Philanthropy puts it, “CSR companies often sponsor commendable activities, such as recycling drives and volunteering, while still making financial profit a priority that’s above all else. With social profit orientation, financial profits and benefits for the common good are equally prized. It is a deliberate, strategic, organisation-wide effort to address systemic social and environmental challenges.”

Unlike CSR, which addresses social issues as an aside to business objectives, social profit orientation embeds social impact into the core mission of the organisation. These organisations focus not just on financial profit but on creating long-lasting social impact as a primary goal, too.

To better understand this, let’s look at some well-known examples of organisations that are already steeped in social profit orientation:

TOMS Shoes: TOMS Shoes pioneered the “One for One” model. For every pair of shoes sold, a pair is donated to a child in need.

Ben & Jerry’s: Ben & Jerry’s is a socially conscious ice cream company that advocates for causes like climate action, marriage equality and racial justice.

Patagonia: A for-profit outdoor clothing company, Patagonia donates 1% of all its sales to environmental causes. The organisation also has a “Worn Wear” program, encouraging customers to repair and reuse its products rather than buy new ones.

Why is social profit orientation so important?

According to the Chronicle of Philanthropy, when for-profit organisations adopt a social profit orientation, “Reputations are strengthened, employees are energised, external relationships are enhanced, new competencies are created—and society benefits.”

When organisations go beyond CSR, they can:

Enhance reputation and trust: Consumers want to buy from organisations that operate on a promise of social change and activism and follow through on that promise. When an organisation adopts a social profit orientation and adheres to it, it builds trust with consumers and stakeholders.

Attract top talent and investors: Social profit-oriented organisations are also better positioned to receive more funding and attract more talent. Both of which, of course, can lead to greater success and long-term sustainability.

Increase their market differentiation: Companies that embed social impact into their core operations can stand out in competitive markets. Value-driven consumers, who make up the vast majority of the consumer base today, are likely more interested in purchasing from a company that is doing good than a company that is not.

For nonprofits, social profit orientation provides an obvious benefit. When for-profit corporations — who often have immense resources and influence — prioritise social impact, and aim to make a difference, they bolster the efforts of large and small nonprofits everywhere.

The key components of social profit orientation approach

Just like CSR, social profit orientation can take many forms. However, the most successful social profit-orientated organisations tend to have a few things in common. Most of these companies:

Clearly make social impact a core goal: Most obviously, a successful social profit orientation clearly defines social impact as a primary objective. These organisations often embed this mission into everything they do.

Address root causes: Typically, a social profit orientation aims to address the underlying causes of societal challenges. While many CSR initiatives focus on just the symptoms of a social issue, social profit-oriented oragnisatinos tend to take a more long-term approach to creating change. In this way, these businesses often act as leaders in the journey toward change, not just participants.

Welcome innovation: Often, social profit organisations produce new products, services or systems that aim to help solve complex social problems.

Leverage partnerships: Social profit-oriented organisations also often collaborate with other organisations — nonprofits, other for-profit businesses, government agencies, etc. — to maximise impact.

Consistently measure impact: These organisations typically implement robust methods for measuring and evaluating their social impact — regardless of what their focus is.

Commit to transparency: To build trust with stakeholders and fulfill missions, these organisations are often regularly report on both financial and social outcomes. These outcomes are then often broadcast to the public as well as internal stakeholders.

Going beyond CSR with social profit orientation

In a time when consumers are looking to purchase products or services from ethical companies, going beyond CSR is essential for both organisational sustainability and true social impact.

For grantmaking foundations and nonprofits looking to maximise their efforts, team up with  social profit-oriented businesses that are ready to make lasting change. Their dedication, power and influence can help charities everywhere double down on their efforts and make more impact than ever.